In the case of Stemcor USA, Inc. v. Cia Siderurgica do Para Cosipar decided the end of May 2019 by the Louisiana Supreme Court on a question certified by the U.S. Fifth Circuit Court of Appeals, the courts held: “Louisiana Code of Civil Procedure article 3542 allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment.”
This case involved a dispute between two creditors, each of which attached the same pig iron owned by America Metals Trading L.L.P. (“AMT”). Daewoo International Corp. sued AMT in the Eastern District of Louisiana seeking an order compelling AMT to arbitrate and an attachment of the pig iron. Daewoo invoked both maritime attachment and the Louisiana non-resident attachment statute, which allows attachments in aid of any “action for a money judgment.” La. Code Civ. Proc. art. 3542. Citing both types of attachment, the District Court granted Daewoo its attachment.
Following Daewoo’s attachment, Thyssenkrupp Mannex GMBH (“TKM”) attached the same pig iron in Louisiana state court. TKM then intervened in the Federal suit, arguing that Daewoo’s attachment should be vacated because (1) maritime jurisdiction was improper and (2) Louisiana non-resident attachment was inapplicable. The District Court agreed with TKM and vacated Daewoo’s attachment. Specifically, the District Court found that because Daewoo’s underlying suit sought to compel arbitration, it was not an “action for a money judgment” and therefore Daewoo could not receive a non-resident attachment writ.
Daewoo appealed only the District Court’s conclusion that its Louisiana non-resident attachment writ was invalid.
Originally, the Fifth Circuit vacated and remanded. On rehearing, the Court affirmed, albeit on slightly different grounds.
On second rehearing of this matter, the Fifth Circuit certified to the Louisiana Supreme Court the question of whether a suit seeking to compel arbitration is an “action for a money judgment” under Louisiana’s non-resident attachment statute, Louisiana Code of Civil Procedure article 3542.
The Louisiana Supreme Court accepted the certified question and answered:
“Louisiana Code of Civil Procedure article 3542 allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment.” See the Louisiana Supreme Court decision at Stemcor USA Inc. v. Cia Siderurgica do Para Cosipar, — So.3d —-, 2018-CQ-1728, 2019 WL 2041826, *1 (La. May 8, 2019).
Given the Louisiana Supreme Court’s answer, the Fifth Circuit Court concluded in late June 2019 that Louisiana’s nonresident attachment statute allows for attachment in aid of arbitration. The Fifth Circuit Court substituted its new opinion vacating the judgment of the District Court and remanding.
Click here to read the case in its entirety.